2007 (4) TMI 782 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of investigation by the Bureau of Investigation.
2. Authority and jurisdiction of the Bureau of Investigation.
3. Sanction for prosecution.
4. Involvement and liability of the petitioners.

Detailed Analysis:

1. Legality of Investigation by the Bureau of Investigation:
The petitioners argued that the investigation conducted by the Bureau of Investigation was illegal as it had no authority to investigate offences under the Indian Penal Code (IPC). The FIR was registered under various sections of the West Bengal Sales Tax Act, 1994, and the IPC. The learned Advocate for the petitioners contended that only police officers could investigate offences under the IPC, not the Bureau. The Court agreed with this view, stating that the Bureau could investigate matters related to tax evasion under the Sales Tax Act but had no jurisdiction over IPC offences. The investigation by the Bureau was deemed improper and without jurisdiction.

2. Authority and Jurisdiction of the Bureau of Investigation:
The Court examined the provisions of the Sales Tax Act, particularly Section 7, which outlines the Bureau's powers. The Bureau was established for enforcing provisions related to tax evasion and malpractices connected therewith. The Court clarified that while the Bureau could investigate tax-related offences, it could not investigate IPC offences. The Bureau's officers were not recognized as regular police officers with the power to investigate under the Code of Criminal Procedure (CrPC). The Court emphasized that the Bureau must operate within the confines of the Sales Tax Act and could not extend its jurisdiction to IPC offences.

3. Sanction for Prosecution:
The Court noted that Section 88(12) of the Sales Tax Act requires prior sanction from the Commissioner for prosecuting offences under the Act. The sanction granted by the Commissioner did not include the petitioners, making the prosecution against them invalid. The Court highlighted that the Commissioner could only sanction prosecutions related to the Sales Tax Act, not IPC offences. Consequently, the initiation of proceedings against the petitioners was deemed improper due to the lack of proper sanction.

4. Involvement and Liability of the Petitioners:
The petitioners were not named in the FIR and had no direct involvement in the alleged incident. They were employees of the proprietor and had no responsibility for paying sales tax. The Court found no evidence linking the petitioners to the alleged tax evasion. The continuation of criminal proceedings against them was considered an abuse of the process of law. The Court set aside the chargesheet and the order of cognizance against the petitioners, as well as the warrant of arrest issued against them.

Conclusion:
The Court concluded that the Bureau of Investigation had no authority to investigate IPC offences and that the investigation conducted by the Bureau was illegal. The sanction for prosecution was defective, and the proceedings against the petitioners were improper. The Court partially allowed the revisional application, setting aside the chargesheet and related orders against the petitioners while reserving its opinion on the investigation against other accused persons. The Court directed the Criminal Section to forward copies of the order to relevant judicial authorities for necessary action.